Delhi discoms demand 20% hike in power tariff

The companies have cited severe fund crunch as reason for the hike

The power tariff in the national capital may see a steep rise of up to 20% if Delhi Electricity Regulatory Commission (DERC) accepts a demand of the three private power distribution companies which have strongly sought the hike citing severe fund crunch.

Currently, the DERC is in the process of reviewing the power tariff for 2015-16 and has hinted that it may go up notwithstanding AAP government's firm position against any increase.

Sources said the three private power distribution companies have sought up to 20% hike in tariff to meet rising cost of power procurement.

They said Tata Power Delhi Distribution Ltd has sought around 20% increase in tariff while BSES Yamuna Power Ltd (BYPL) and BSES Rajdhani Power Ltd (BRPL) have demanded a hike of 19% and 16% respectively.

Power Regulator DERC, a quasi-judicial body, is likely to announce revised power rates next month after taking views of all the stakeholders including resident welfare associations and the discoms.

The AAP government had asked DERC to explain a series of hikes it effected in the last couple of years and indicated to it not to hike the tariff again till the Comptroller and Auditor General completed audit of the discoms.

However, DERC refused to follow Delhi government's diktat and decided to go ahead with the tariff determination process, arguing that the commission was "totally independent" to review the rates.

The private power distribution companies have already conveyed to DERC that "absence of cost reflective tariff and denial of Power Purchase Adjustment Cost (PPAC) for last few months have depleted their financial positions".

The PPAC, which was introduced four years ago to help the discoms adjust their power purchase cost, was discontinued by the regulator five months ago.

As per DERC figures, the two BSES discoms have a revenue gap of around Rs 10,000 crore between 2009-2013.

According to power experts, cost of buying power by Delhi discoms has increased by around 300% since 2002 though the retail tariff has risen by only around 90% which has put strain on finances of the discoms.